Cold chain crisis: India loses Rs 92,000 crore of crops every year

India loses crops worth R92,651 crore a year during and after harvesting is completed due to a shortage of cold chain facilities and limited food processing capacity, reports Banikinkar Pattanayak in New Delhi.

The study shows the losses are highest at 34% for fruit and vegetables, followed by cereal at 22% and livestock produce at 20%. (Reuters)

India loses crops worth R92,651 crore a year during and after harvesting is completed due to a shortage of cold chain facilities and limited food processing capacity, reports Banikinkar Pattanayak in New Delhi, citing a study by the Central Institute of Post Harvest Engineering & Technology (CIPHET). The study shows the losses are highest at 34% for fruit and vegetables, followed by cereal at 22% and livestock produce at 20%. The reason for high losses in the fruit and vegetable segments are higher market prices of such items compared with key grains, and the fact they perish faster. Post-harvest, fruits and vegetables need immediate attention, the report suggests. The study estimates the losses based on the crop production of 2012-13 and wholesale prices of 2014. The massive losses also bring to fore another hard fact: India is the world’s largest producer of milk and the second-largest grower of rice, wheat, fruit and vegetables, but the processing level of such items currently stands at just 10%.

To improve the storage and processing capacities, food processing minister Harsimrat Kaur Badal this week announced awarding government grants to eligible companies, including Big Basket, Amul, Haldiram and Falcon Marine Exports, to build a total of 101 cold chains with a combined storage capacity of 2,76,000 tonnes of farm and food items. This is for the first time that the government will award so many cold chain projects in one go. The ministry is stepping up efforts to more than double the processing level over the next five years. The investments on these 101 cold chains will be to the tune of Rs 3,100 crore, including the government grant of Rs 838 crore. The rest — over Rs 2,200 crore — will be invested by the companies concerned.

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To attract big players to the country’s food sector, in June last year the government also notified that 100% foreign direct investment will be permitted in trading — including through e-commerce — of food products produced or manufactured in India, subject to the approval of the Foreign Investment Promotion Board. The decision to allow it was part of the government’s announcement in the 2016-17 Budget. The move will help farmers, offer fresh impetus to the food processing industry and create employment opportunities, Badal had earlier said.